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Spurred by a year of unprecedented disruption, 2020 saw real-time payments grow larger—in terms of both volumes and values—and faster than anyone could have anticipated.

Changes to business models and consumer behavior, prompted by the COVID-19 pandemic, have compressed many years’ worth of transformation and digitization into the space of several months. More people and more businesses around the world have access to real-time payments in more forms than ever before. Real-time payments have been truly democratized, several years earlier than previously expected.

Central infrastructures (CI) were already making swift progress toward this goal before the pandemic intervened, having established and enhanced real-time rails at record pace. But now, in response to COVID’s unique challenges, the pace has increased markedly as countries around the world look to advance their modernization roadmaps to maximize liquidity in their economies and stimulate growth.

For these CIs, and indeed all payment players around the world, India, the world’s biggest real-time payments market, remains the benchmark for what’s possible when it comes to adoption. It’s also a vivid illustration of the way innovation snowballs when the market forces of demand and competition are unleashed onto a robust real-time infrastructure. As each new use case builds on the last, India’s real-time market is moving swiftly past entry-level use cases, such as person-to-person (P2P) transfers and merchant payments, to bill, tax and toll payments.

Singling out one country might seem unusual. But where India is leading, we expect most markets to follow, sooner or later—because it is low-value consumer payments of exactly the type seen in India that drive the highest volumes in almost every real-time payments ecosystem covered in this report.

For consumers, low-value real-time payments mean immediate funds availability when sending and receiving money. For merchants or billers, it can mean instant confirmation, settlement finality and real-time information about the payment. And at the center of these experiences are acquirers, a key enabler in the real-time payments value chain for developing and maturing markets alike. As a result, the space is becoming increasingly competitive, particularly as eCommerce has exploded. The pressure has never been higher for acquirers to leverage the real-time rails to add value beyond enabling merchants to accept customers’ preferred payment mediums, whatever they may be. In the year ahead, they must proactively develop overlay services that enhance the consumer experience, such as Request to Pay—or risk allowing fintechs to further encroach on their revenue streams.

With all of that said, however, we are beginning to see the majority of real-time schemes also account for large corporate needs, dispelling the misconception that real-time payments are exclusively a consumer payments and P2P opportunity. It’s early stages in this process, but there’s no technical reason preventing the infrastructures being put in place from handling payments of millions of dollars. Reserve bank or central government sponsorship inspires ample confidence in the reliability of real-time payments.

Regardless of whether real-time schemes are initially conceived to cater to consumer or business needs, the global picture is one in which heavily localized use cases are “the last mile” in the journey to successfully driving adoption. Market to market buying behavior is unique. So too is mobile phone use and the size, strength and composition of the small and medium business sector—not to mention favored payment types. So, while the universal top line remains that P2P and consumer to business (C2B) drive the majority of transaction volume growth, business-to-business (B2B) use cases promise to create high margin opportunities and drive higher values of transactions through real-time payment networks. New system operators and participants can learn lessons from established markets about schemes’ functions and features. But, without real-time payment use cases that reflect and build on local factors, adoption will stall.

To learn more about the growing global footprint of real-time payment schemes and country level trends in 48 countries, download the 2021 Prime Time for Real-Time report.

Chief Product Officer

Jeremy Wilmot is ACI’s chief product officer. In this role, he leads ACI’s product management organization, which is focused on strategically deploying world-class products to maximize growth and profitability. He is well versed in ACI’s unique product portfolio and uses that knowledge to ensure our products are best addressing the needs of the market and the needs of the customers in our three core segments—banks & financial intermediaries, merchants and billers.